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PETRONAS’ Commendable 1Q2019 Results Buoyed By Operational Excellence, Fiscal Discipline

Source: Focus Malaysia

Kuala Lumpur, 31 May 2019 – PETRONAS today announced a robust 2019 first quarter financial performance, as it pursued its three-pronged strategy to maximise cash generation, extend its value chain and step out into new ventures. The results were further supported by the Group’s continuous pursuit of operational excellence and fiscal discipline.

 The Group recorded a revenue of RM62.0 billion for the first quarter of 2019, an increase of 7 percent from RM57.9 billion in the corresponding quarter last year. The revenue was driven by higher sales volume for petroleum products and LNG, coupled with the effect of the weakening Ringgit against the US Dollar exchange rate.

These were partially offset by lower average realised prices, mainly for petroleum products, crude oil and condensates. First quarter Profit After Tax (PAT) stood at RM14.2 billion, up by 9 per cent on the back of higher revenue, but partially offset by increased net product and production costs, lower net write-back of assets impairment and higher contribution to the National Trust Fund.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) registered a growth of 11 per cent to RM27.8 billion compared to RM25.0 billion in the corresponding quarter last year, in line with higher Profit Before Tax (PBT). Cash flows from operations rose to RM23.2 billion, an increase of 6 per cent from RM21.9 billion in the same quarter last year. 

Total assets decreased marginally to RM636.2 billion as at 31 March 2019 from RM636.3 billion as at 31 December 2018. Shareholders’ equity increased to RM389.1 billion compared to RM380.5 billion in the same period last year, primarily driven by profit generated during the period.

However, this was partially offset by movements in the foreign currency translation reserve. Gearing ratio increased to 20.8 per cent as at 31 March 2019 compared to 19.7 per cent as at 31 December 2018, as additional lease liabilities were recognised following the adoption of a new accounting standard, MFRS 16 Leases.

Meanwhile, Return on Average Capital Employed (ROACE) increased slightly to 12.1 per cent from 12.0 per cent in the previous quarter, in line with the higher profit recorded. The Group’s capital investment during the first quarter of 2019, was RM8.3 billion, mainly tributable to Upstream projects.

 Outlook

The oil and gas industry will continue to operate in a challenging environment arising from market uncertainties and geopolitical risks.

The Group will maintain its efforts in instilling strong cost discipline and driving operational excellence in pursuit of its growth strategies. The Board expects the overall year-end performance of PETRONAS Group to be affected by the rising volatility of oil price and foreign exchange movement.

 Tan Sri Wan Zulkiflee Wan Ariffin, President and Group CEO PETRONAS

PETRONAS’ improved performance in the first quarter of 2019 compared to the same period last year demonstrates the strength of our three-pronged strategy and resolute execution focused on continuous overall business improvement as well as commercial and operational excellence.

 Looking ahead, while facing market uncertainties, we will continue to invest for the future and have recently expanded our Upstream portfolio through our equity acquisition of the Tartaruga Verde field in Brazil. Our strategic intent to venture beyond oil and gas has also made significant progress with our recent investments in renewables and specialty chemicals.

More details on Downstream and Upstream Operational Highlights here